Actionable Conclusions (1-10): Analysts Estimated 24.9% To 80.2% Net Gains For Ten Top BlackRock Select Dogs Come July 2020
Three of ten top BlackRock-held dividend stocks by yield were among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below). Thus, this yield-based forecast for BlackRock selected dogs was graded by Wall St. Wizards as 30% accurate.
Projections were based on estimated dividends from $1000 invested in each of the highest yielding stocks and their aggregate one year analyst median target prices, as reported by YCharts. Note: one year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to June 28, 2020 were:
Tecnoglass Inc (TGLS) was projected to net $802.03, based on a median of target price estimates from five analysts plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk equal to the market as a whole.
Ternium SA (TX) was projected to net $470.16, based on a median of target price estimate from fifteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risks 38% less than the market as a whole.
BG Staffing Inc (BGSF) was projected to net $404.24, based on the median of target price estimates from two analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risks 2% less than the market as a whole.
Bank of N.T Butterfield & Son (NTB) was projected to net $390.45, based on dividends, plus the median of target price estimates from six analysts, less broker fees. A Beta number was not available for NTB.
China Petroleum & Chemical (SNP) was projected to net $390.38, based on dividends, plus the median of target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to volatility 50% more than the market as a whole.
Kohl's Corp (KSS) netted $371.32 based on the median of estimates from twenty-one analysts, plus dividends. The Beta number showed this estimate subject to volatility, 2% less than the market as a whole.
KAR Auction Services Inc (KAR) was projected to net $350.00, based on the median of target estimates from 13 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risks 49% less than the market as a whole.
Pennant Park Investment (PNNT) was projected to net $306.43, based on dividends, plus the median of target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to risk 14% more than the market as a whole.
Cherry Hill Mortgage Investment (CHMI) was projected to net $300.00 based on dividends, plus the median of target estimates from three brokers, less transaction fees. The Beta number showed this estimate subject to risk 66% less than the market as a whole.
Park Hotels & Resorts (PK) was projected to net $249.08, based on dividends, plus a mean target price estimate from thirteen analysts, less broker fees. A Beta number was not available for PK.
The average net gain in dividend and price was estimated at 40.34% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risks 29% less than the market as a whole.
The Dividend Dogs Rule
Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best called, "underdogs".
The BlackRock Holdings Sample For July 2019
How do you measure solidity in a collection of 4,375 BlackRock owned equities?
The screening of a YChart data field started by finding how many of the 4.38K stocks paid dividends yielding more than 3.75%; that narrowed the field to 585.
Market capitalization over $100M lowered the number to 581. A $5 or more price tag lowered the field to 501.
One year returns greater than a $15 loss cut the candidate list to 155. Stocks given a positive rating by brokers brought the number down to 146.
The final cuts were determined by YChart fundamental and value rankings based on financial reports from each firm. A 7 to 10 fundamental score cut the field to 82, then an 8-10 value rating determined the final 60.
50 BlackRock Holdings By Target Gains
50 BlackRock Holdings By Yield
Actionable Conclusions (11-20): 10 Top BlackRock Stocks By Yield
Top ten BlackRock stocks selected 6/28/19 by yield represented four of eleven Morningstar sectors.
Top dog was one of wo real estate sector representatives in the top ten, Cherry Hill Mortgage Investment Corp (CHMI) . The other real estate representative placed eighth, Whitestone REIT (WSR) .
Six financial services BlackRock holdings placed second, fourth though sixth, ninth, and tenth: Pennant Park Investment Corp (PNNT) ; WhiteHorse Finance Inc (WHF) ; Stellus Capital Investment Corp (SCM) ; New Mountain Finance Corp (NMFC) ; Ares Capital Corp (ARCC) ; Solar Senior Capital Ltd (SUNS) .
The lone consumer cyclical representative was third, The Cato Corp (CATO) . Finally, one from the energy sector placed seventh, China Petroleum & Chemical Corp (SNP) , to complete the BlackRock top ten dogs by yield.
Actionable Conclusions: (21-30) Top Ten July BlackRock Dividend Dogs Showed 18.88%-72.57% Upsides While (31) No Downsiders Were Allowed.
To quantify top dog rankings, analyst mean price target estimates provide a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analyst mean price target estimates became another tool to dig out bargains.
Analysts Forecast A 14.27% Disadvantage For 5 Highest Yield, Lowest Priced BlackRock Dividend Stocks To 2020
Ten top BlackRoack dividend dogs were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.
As noted above, top ten Solid BlackRock-held dividend dogs selected 6/28/19 showing the highest dividend yields represented four of eleven Morningstar sectors.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield BlackRock Dogs (32) Delivering 17.77% Vs. (33) 20.73% Net Gains by All Ten Come July, 2020
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten BlackRock-held kennel by dividend yield were predicted by analyst 1-year targets to deliver 28.15% LESS gain than $5,000 invested as $.5k in all ten. The very highest priced selection, China Petroleum & Chemical Corp (SNP), was projected to deliver the best net gain of 39.04%.
The five lowest-priced top-yield BlackRock-held dividend dogs as of June 28 were: Pennant Park Investment Corp (PNNT), The Cato Corp (CATO); Whitestone REIT (WSR); WhiteHorse Finance Inc Inc (WHF); Stellus Capital Investment Corp (SCM)New Mountain Finance Corp (NMFC), with prices ranging from $632 to $13.83.
Five higher-priced Solid Goldman-held dividend dogs as of June 26 were: New Mountain Finance Corp (NMFC); Solar Senior Capital Ltd (SUNS); Cherry Hill Mortgage Investment Corp (CHMI); Ares Capital Corp (ARCC); China Petroleum & Chemical Corp (SNP), whose prices ranged from $13.97 to $68.20.
The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.
The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.
Stocks listed above were suggested only as possible reference points for your Kiplinger Billionaire Picks stock purchase or sale research process. These were not recommendations.
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.
Get The Entire BlackRock 'Safer' Dividend Dog Story
Click here to subscribe to The Dividend Dogcatcher. Get more information, the follow-up to this article, and a free two week trial.
Catch A Dog On Facebook At 8:45 AM every NYSE trade day on Facebook/Dividend Dog Catcher, A Fredrik Arnold live video highlights a portfolio candidate in the Underdog Daily Dividend Show!
Root for the Underdog. Comment below on any stock ticker to make it eligible for my next FA follower report.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.